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HomeMy WebLinkAbout04-22-02 Finance Com Minutes -Hotel-Motel Tax GrantsDublin City Council Finance Committee April 22, 2002 Attending: Mr. Kranstuber Ms. Chinnici-Zuercher, Chair (excused) Mr. Lecklider Ms. Gibson, Director of Taxation Ms. Puskarcik, Director of Community Relations Mr. Kranstuber called the meeting to order at 6:15 p.m., noting that tonighYs meeting has been scheduled to discuss the hoteUmotel tax grant application from the Ohio F.C. Soccer Club 2002 Nike Challenge Cup. Representing the Club were Dave Hill, Executive Director and Robert Cohn, Tournament Director. Mr. Cohn stated that they are seeking financial assistance for the F.C. Soccer Tournament. The tournament has been in existence since 1999 and injects an enormous amount of funds into the City, mainly through the large number of visitors, participants, who stay in the City's hotels. There is also financial spillover into area businesses during their visit. The DCVB has indicated that the financial impact to the City with respect to the Tournament in 2001 was over $1.2 million; in 2000 was $944,000; and in 1999, was $722,000. Teams seeking a higher level of competition are attracted from a 12-state area. They have filled every hotel in the City of Dublin, and many in the surrounding area. The event is labor intensive, requiring certified referees -many come from out of state and require hotel rooms. These are fixed costs to operate the Tournament. There are field preparation and rental costs for additional fields. Typically, they use Soccer First, Avery Park and Darree Fields, with minor spillover at Coffman High School. This year, they have also secured land at Pharmacia and at 5150 Blazer Parkway for additional field space. Parking spaces for these areas were also secured, plus portable restrooms. Through this application, they are seeking a grant of $25,000 to help cover the costs associated with the Tournament. Mr. Hill explained that teams are participating from 12 states, with 278 teams operating on five venues, all in Dublin. They will be conducting 451 games in 2-1/2 days for 5400 participants - players and coaches. Total attendance is estimated at 13,400 people this weekend, and estimated economic impact since 1999 through this year is approximately $2 million. Mr. Kranstuber noted that the numbers from 1999 through 2001 indicate a 30 percent growth factor per year. Has any thought been given to limiting the size of the event, due to limitations of venues? Mr. Hill responded that the limiting factors for growth are field availability and referees. Mr. Kranstuber asked how participants are encouraged to stay at Dublin hotels. Mr. Hill responded that the first hotel information provided is for Dublin area hotels. Once the block is saturated, the DCVB works with them to access the broader Columbus market. Mr. Cohn noted that the web site lists only the Dublin hotels until those are filled. Mr. Kranstuber stated that one consideration for the Committee is that this event is held in April, a time when hotel rooms are not filled with other events such as during the Dublin Irish Festival or CABA Tournament. Finance Committee April 22, 2002 Page 2 Mr. Kranstuber asked how the group arrived at the figure being requested from the City, and have they requested bed tax funds previously. Mr. Hill stated that this is their first application for funds in Dublin. They were encouraged to apply for funding by the DCVB, who made them aware of this funding source. At this point, Ms. Puskarcik arrived. Mr. Lecklider noted that the materials reference Ms. Huffman as working for the Chamber of Commerce instead of the Dublin Convention & Visitors Bureau. This correction should be made. He noted that the membership fee revenues are considerably less this year than in previous years. He asked for clarification. Mr. Hill responded that a merger occurred of several clubs and so there was a peak and then a leveling off of membership fees. Mr. Lecklider asked for an estimate of their total budget for this year for the Tournament. Mr. Hill responded that the budget is totally based on the number of participants. Revenues from entry fees are estimated at $85,000; there are other revenue streams from merchandise sales and concessions. They expect to clear approximately $20-25,000. It is all based upon many variables. The weather has resulted in the need for extensive field prep. When they ask for additional prep beyond the normal cutting schedule, they have to pay the City for these services. Mr. Cohn stated that the referee costs are approximately $30,000 due to the additional fields being used. Mr. Hill stated that field fixed expenses are $10,000; City services are estimated at $3-5,000. The total of fixed expenses for the Tournament are approximately $45,000. Ms. Puskarcik stated that she will meet with the applicants to finalize arrangements tomorrow. Mr. Kranstuber noted that the Committee will make recommendation to Council, and Council will then vote on the recommendation at tonight's meeting. He asked the applicants why the City should grant them funds when they have indicated that they are anticipating a profit with this venture. Mr. Hill responded that they have done an internal cost/benefit analysis. In 1998, there were only 16 teams participating. Without this type of funding assistance, from a resource perspective, i.e., volunteers, they may be forced to scale back the Tournament to a more manageable level. Mr. Kranstuber thanked the applicants for their testimony. Mr. Lecklider stated that the figures are fairly solid for the hotel rooms, and the monies will be spent in Dublin, as they have indicated. It meets the criteria of filling hotel rooms, thereby producing hoteUmotel tax revenue. Finance Committee April 22, 2002 Page 3 Ms. Puskarcik agreed, noting that this Tournament fills hotel beds during a time of year when there is not a large demand. In some cases, there are applications which are more cultural in nature, but this application clearly meets the criteria for generating bed tax revenue. Mr. Lecklider noted that from the materials provided, the expenses are 50-60,000 -including $30,000 for referees, $10,000 for field preparation, $5-10,000 for City services, and rental expense for fields. Ms. Gibson clarified that City service expense is estimated at $3-5,000. Mr. Kranstuber stated that it is important to view this application in the context of the $150,000 bed tax funds available for the entire year, and the fact that 6 additional applications are yet to be reviewed. Ms. Gibson clarified that the unencumbered budget is actually @$80,000, while the applications for funding total $131,000. The DYA field lighting project, as approved last fall, encumbers $70,000 of this year's funds. In the September application timeframe, the CABA Tournament will be requesting funding of the cost of City services -approximately $7,000. They will not be requesting a major capital project this fall. Mr. Lecklider and Mr. Kranstuber agreed upon a $10,000 grant for the F.C. Soccer Tournament. Mr. Kranstuber stated that his prejudice is toward projects that culturally benefit the citizens, such as the Big Apple circus, or toward capital projects that are enduring. He recognizes, however, that the criteria for bed tax grants is hotel room nights, and this application certainly meets that criteria. It was the consensus of the Committee to recommend a grant to include 100 percent of the cost of City services, plus additional grant money up to a maximum of $10,000. The meeting was adjourned at 7:00 p.m. Clerk of Council